JAMES J. HILL

J. Hill was the Empire Builder who started with nothing but a vision of the future. It was the vision that made him special and different from others involved in business. He saw what he was working toward and used his business strategies to always plan for the future. Unlike other railroad builders such as Cornelius Vanderbilt who built their railroads around a population, Hill built a population around his railroad. This technique was unsuccessful for others but Hill's business skill, experience, and planning made his railroad progress rapidly. The land he built on was considered a wasteland, unsuitable for population. Hill was not a selfish man but instead one who used his business skills to develop the best railroad network possible. His railroads went from the Great Lakes to the Puget Sound and from Canada to the South. As his railroads grew, he extended his empire across the Pacific to the Orient. Hill's railroads were impressive in length, growth rate, and revenue.James J. Hill was born on September 16, 1838 in the small town of Rockwood, Ontario. His father's death interrupted his early education and Hill had to help with the family finances. He showed a lot of academic growth and the head of the Rockwood Academy gave Hill free tuition.(1) His loss of one eye by an accidental arrow shot prevented him from the career in medicine that his parents wished him to have. By age 18, Hill was enthusiastic about the Far East and determined to be a trader in the Orient like Marco Polo. He was unable to leave from the east coast, so he headed west in hope of joining a team of trappers.(2) Hill arrived in St. Paul on July 21, 1856 by steamboat.(3) St. Paul was a popular town for trappers. However, Hill missed the last brigade of the year by a few days and would have to wait a full year for another one. During his wait in St. Paul, he became attached to the town and decided that it would be his business base.(4)Hill's first job in St. Paul was as a forwarding agent for the Mississippi River Steamboat Company. He set fixed freight and passenger rates there and learned steamboat operation.(5) Hill then enlisted for the Civil War but was rejected because he had lost one eye. He organized the First Minnesota Volunteers. Hill saw the demands of war and learned the important skills needed. During the war, Hill pressed and sold hay, learned to buy and sell goods at a profit, chose the least expensive method to move products, and served as a warehouseman.(6)After the war, in 1866, Hill became an agent for the First Division of the St. Paul & Pacific Railroad.(7) The St. Paul & Pacific currently used wood for fuel. Hill thought that coal would be better fuel so he made a contract with the railroad to supply it with coal. Hill soon formed a business with Chauncey W. Griggs, a Connecticut man in the wholesale grocery business. Together they made Hill, Griggs & Company, a fuel, freighting, merchandising, and warehouse company. They had a monopoly on the fuel business in the city and nearby region.(8)Hill was closely watching the Red River of the North that flowed north to Lake Winnipeg. Fort Garry (presently Winnipeg) was an important Hudson Bay Company post. It was trying to keep control over Canadian fur trade but did not serve independent traders. Hill transported the freight of individuals and the Hudson Bay Company found this competition dangerous. Norman Kittson of the Hudson Bay Company joined with Hill to form the Red River Transportation Company. Hill traveled up Red River in 1870 to investigate the cause of a French and Indian mob who captured the Hudson's Bay Company post in Fort Garry. During that trip and others, Hill saw the rich soil of the region and watched the St. Paul & Pacific's steady decline. Grasshoppers devoured everything in the area making it impossible to farm and even made it difficult for locomotives to get traction on the rails.(9) Hill thought that if he could buy the railroad line then he could make a profit from it by extending it to Fort Garry. The St. Paul & Pacific was already in bad physical and financial condition but the panic of 1873 made it even worse. The Northern Pacific Railroad had planned to buy the railroad but the Panic of 1873 put it under receivership. Hill saw his chance to acquire the St. Paul & Pacific and other lines in similar crises.(10)Hill first went to Norman Kittson, who had previously worked with him on the steamship line. Kittson and Hill both had a little money but needed much more. Together they went to Donald Smith of the Hudson's Bay Company and told him their plan for making the St. Paul & Pacific a profitable line. Smith offered money and talked with George Stephen, president of the Bank of Montreal.(11) The four of them bought the St. Paul & Pacific for $280,000 which Hill estimated as 20% of the railroad's value.(12) Hill's next mission was to make it a productive route.Hill purchased rails, rolling stock, locomotives, and laborers. He pushed the workers hard and they laid more than one mile of track daily.(13) It connected with a Canadian Pacific branch from Fort Garry at St. Vincent, Minnesota in 1879. Canadian Pacific's transcontinental route was not completed yet so all traffic through Fort Garry had to use Hill's route. Hill received two million acres of land in the Minnesota Land Grant for completing the rail line on time.(14) He rearranged his railroad into the St. Paul, Minneapolis, & Manitoba. Hill had perfect timing in buying the St. Paul & Pacific. Two great harvest seasons followed his purchase which brought more business to the railroad. A great increase in immigrants from Norway and Sweden enabled Hill to sell homesteads from the Minnesota Land Grant for $2.50 to $5 an acre.(15)Hill's success came from planning for the future, which other builders of that time did not do. He looked toward the future to achieve his goals and overcame the doubts of others.(16) He studied areas in close detail and planned exactly where the track would be best laid by locomotive, handcar, passenger coach, caboose, and horseback. Hill did all the analysis of grades and curves himself and often argued with his engineers and track foremen demanding changes when he felt them necessary. Hill insisted on having the best in everything he did. He wanted huge bridges made with thick granite. He wanted the biggest locomotives and the best steel, too. He was a great financier, even against J.P. Morgan.During his planning of his St. Paul, Minneapolis, & Manitoba route, Hill got involved in the construction of the Canadian Pacific Railway. Donald Smith and George Stephen who had worked with him on the purchase of the St. Paul & Pacific were leaders behind the Canadian transcontinental route. They invited Hill to join them on the Canadian Pacific Railway and Hill accepted. He gave advice about selected routes and construction policies.(17)The greatest contribution Hill made was his recommendation of William Cornelius Van Horne to be construction manager. Van Horne drove his construction crews hard and got the Canadian Pacific Railway to the Pacific quickly.(18) Because the Canadian Pacific would soon become a competitor to his own transcontinental route, Hill resigned from the Canadian Pacific and sold all of his stock in 1882.(19)Only one year after the purchase of the St. Paul & Pacific Railroad, Hill had already planned to build his railroad to the Pacific. Many people thought Hill could never accomplish such a goal. Never before had someone tried building such a railroad without government land and loans. Railroads like the Union Pacific, Central Pacific, and Northern Pacific were each given millions of acres of public land to build their transcontinental routes. People thought that even if Hill could construct his dream, how could he possibly compete with government-funded lines? Hill's idea to build a railroad to the Pacific became known as Hill's Folly.(20)Planning for the westward expansion of the St. Paul, Minneapolis, & Manitoba went well.(21) Construction started quickly and reached Minot, North Dakota in 1886.(22) The route ran north of the Northern Pacific Railway. The Northern Pacific was poorly built through worthless land. It had steep grades, high interest charges, and high property taxes. Hill's planning resulted in a much better route. A railroad line would help any town during that era and Hill was able to get a good right-of-way for the railroad. However, the town of Fort Benton, Montana rejected Hill's request for a track through town. Hill decided that if the town wanted to be difficult about construction, than he would cut them off from the world and build his railroad around it. He left the town one mile from any location on the railroad. This shows Hill's attitude toward those who tried to slow his construction.(23)They reached Great Falls in October of 1887 through surprisingly quick construction. Hill was employing 8000 men and 3300 horse teams when building his transcontinental route.(24) Hill connected his line with the Montana Central Railroad at Great Falls which went to Helena, Montana and brought a lot of business. (25)Hill encouraged settlement by letting immigrants travel halfway across the country on his railroad for $10 if they would settle along the route. He rented entire families freight cars for little more money. These were strategies that other railroads rarely used during this era and encouraged a lot of business.(26)Hill created the Great Northern Railway Company and the St. Paul, Minneapolis, & Manitoba became a part of it. In 1893 it reached the Puget Sound at Everett, Washington. During that same year, a panic put the Santa Fe and Union Pacific in receivership. The Northern Pacific was put into a worse situation. Hill's Great Northern was the only railroad in the Pacific to remain in good condition through the panic. Hill made an agreement to take over the Northern Pacific Railroad with Edward Tuck and Bank of Montreal associate Lord Mount Stephen. A Great Northern stockholder objected using the Minnesota law prohibiting the combining of parallel and competing railroads. The agreement was stopped. Hill soon got around it though by having his associates help in buying Northern Pacific stock as individuals instead of as a company.(27) The plan succeeded and the Northern Pacific became part of the Great Northern in 1896.(28) The Great Northern now became known as the Hill Lines by most people living in the West.(29)Hill knew that the only eastbound traffic for the first few years would be lumber until the region got developed. Hill was interested in acquiring a line to Chicago and St. Louis where he could ship the lumber. However, shipping lumber east would require empty freight cars returning west if he could not find anything else to ship back west. Hill sent men to Japan and China to study all of their imports and exports. He also sent men to New England, the Atlantic states, and the South searching for things that could be made or grown and exported to the Orient.(30)Hill researched the Chicago, Burlington & Quincy that stretched from the Great Lakes to the Rocky Mountains. It was very strong around Mississippi and Missouri. If Hill could get the Chicago, Burlington & Quincy, he would have a direct cotton-hauling route to St. Louis and Kansas City, and a route to the smelters of Denver and the Black Hills. Most importantly, Hill could have a direct line into the lumber-consuming region of the prairie states. Hill worked with J.P. Morgan and successfully purchased the Chicago, Burlington & Quincy.Edward Henry Harriman, head of the Union Pacific, was also trying to buy the Chicago, Burlington & Quincy. Harriman first attempted to buy the Burlington from Hill by purchasing their stock. This didn't work so Harriman ordered all of his men to purchase a total of 40,000 shares of stock. Again he failed so Hill and Morgan kept control.Hill's agents were productive in finding products to ship to the Orient. Now that Hill had the Chicago, Burlington & Quincy, he arranged to ship products to the Orient via Seattle. He supplied Japan with cotton from the South and shipped New England cotton goods to China. Northern goods such as Minnesota flour and Colorado metals also made Hill a profit when shipped to the Orient.(31)Hill kept prices low and sold products just above cost. He sold lumber along many rail routes in the Northwest to encourage the construction of towns. Hill's dream was to build a civilization that used all of the "wasteland" between the Great Lakes and the Puget Sound so there would be little open land remaining. He even imported cattle and gave them to farmers along his railroads for free to encourage growth. Hill began sending agents to Europe to show slides of Western farming to urge Scotsmen, Englishmen, Norwegians, and Swedes to settle in the Pacific Northwest. As a result of Hill's strategies, more than 6,000,000 acres of Montana land was settled in two years.(32)This rapid growth did cause some problems for the region after Hill's death. Between the years of 1910 and 1922, homesteaders settled 42% of Montana. More than 80% of this settled area was not ready for agriculture which was the main use of it. Deep plowing caused heavy erosion and the consistent strong winds of Montana and the Dakotas blew away much of the soil. Wheat production dropped from 25 bushels an acre in 1916 to 2.4 bushels an acre in 1919. Many homesteaders left and this became one of Hill's few failures.(33)In 1905, the battle between Hill and Harriman began again over Oregon land. Harriman considered Oregon his own territory because of his successful Union Pacific and Southern Pacific railroads in the region. Harriman became worried in 1905 when Hill announced his plans for development in Oregon. Hill had already surveyed the land and began grading and laying track. Harriman set up fake railroad companies as a trick to conflict with Hill's construction. This battle was fought mostly in the court but fist fights, night raids, and the dynamiting of equipment was common. During this struggle, Harriman got appendicitis and had to go to the hospital. As soon as he could sit up in bed, he called Hill to say that he would soon be back in the fight. Hill won the battle though and took control of the Spokane, Portland, & Seattle Railway.(34)Hill saw an opportunity in Central Oregon and took quick action. He built a 165-mile line from Columbia along the Deschutes River to the unknown town of Bend. Very few people populated the entire region around that line and Harriman knew that Hill would not end the line at Bend. Harriman thought Hill was building a direct line to San Francisco and wanted to stop him. Harriman sent a huge construction crew to start laying track on the opposite side of the Deschutes River and called the route the Deschutes Railroad. This quickly became a news story throughout the West as the two railroads battled through the canyon. The railroad crews set off dynamite to interfere with the construction of the other railroad and sent boulders down the canyon walls at the other work crews.(35) They reached a location in the canyon with only one way through. The rancher who owned the land sold a right-of-way to Harriman. Hill had no other route through and had to make a deal with Harriman. Hill agreed that he would not build past Bend and in return he could use that section of Harriman's track that was necessary.(36)Hill had no interest in creating a truce with Harriman and just used it for the Deschutes River line. Harriman's Southern Pacific Railroad still dominated Western Oregon. Hill bought several electric rail lines to operate as competition with the Southern Pacific. Hill also bought an ocean terminal at the mouth of the Columbia River near Astoria. He put two large steamships to operate from this ocean terminal to San Francisco. This proved to be good competition with Harriman's Southern Pacific.(37)In 1907 at age 69, Hill gave the leadership of the Great Northern to his son Louis W. Hill. James Hill stayed active in his railroad empire and came to office every day in St. Paul. In May 1916, he became ill with an infection that spread quickly. Doctors were unable to save him and Hill went into a coma and died on May 29 at age 77.(38)Hill's funeral was at 2:00 p.m. on May 31 and every train and steamship on the Great Northern came to a five minute stop in honor of the builder of the Great Northern Empire.(39)James J. Hill truly did build the Pacific Northwest with his railroads. He started with a huge region that people thought could never be developed. Hill saw the struggling St. Paul & Pacific Railroad and had a vision of expanding it to the Pacific. The states of Minnesota and the Dakotas became popular states for immigration because of Hill. The small town of Seattle, Washington became an international shipping port. America was linked with an excellent railroad network which encouraged rapid growth. Where other railroad builders were searching for ways to get every cent possible, Hill was surveying the land himself, looking to create the most efficient railroad network. Hill had a successful railroad because of the long length of track, wide region it covered, high profits it made, and the expansion it brought to America. He became known as the Empire Builder because of his involvement with the stock market, banking, international trade, and mining. In 1915 at the Panama-Pacific Exposition in San Francisco, Hill was named State of Minnesota's "greatest living citizen."(40)There is no doubt from Hill's accomplishments that he was very successful in his business. He was a self-made man who started from nothing and built one of the most successful railroad networks in America. Hill had a critical effect on the development of our country through his railroad empire. His involvement in many parts of business made James Jerome Hill deserving of his title, The Empire Builder, a legend of success that remains today.